Madalena Energy: Micro-Cap Oil and Gas Company with Active Shareholder

David Tawil of Maglan Capital presented his in-depth investment thesis on Madalena Energy (Canada: MVN) at Best Ideas 2018.

Madalena Energy is the only independent, publicly-traded, Argentina-exclusive oil and gas exploration and production company.

In May 2017, David hand-picked new management for the company, led by Jose Penafiel (CEO) and Alejandro Penafiel (board member). David’s firm, the company’s largest shareholder, has spent the past few years restructuring the company’s asset portfolio, balance sheet, operations, and management.

Madalena generates positive FCF of ~$5 million annually, with David estimating annualized FCF of $9 million as early as 1H18. The business appears fully financed for the next few years. The equity market cap is ~$115 million, and David sees upside to $2 per share vs. a recent quotation of $0.20 per share.

About the instructor:

David D. Tawil is Co-founder of Maglan Capital and serves as President. Maglan is an event-driven, corporate turnaround-focused fund, with a concentration on U.S.- and Argentina-centric, small-cap, activist positions. The fund has been operating for over 6 years and the principals have very deep experience in bankruptcy, turnaround and restructuring. Prior to founding Maglan Capital in 2011, David was an investment banker with Credit Suisse, where he served as Director of Leveraged Finance and co-managed the fixed-income alternative asset trading business, focusing on sourcing and trading illiquid high-yield and distressed debt. Before joining Credit Suisse, David was an attorney with Davis Polk & Wardwell, specializing in workouts and bankruptcies. He began his legal career as an associate at Skadden, Arps. David earned a BS degree in Business Management, graduating magna cum laude, from Yeshiva University, and he earned a JD degree from the University of Michigan Law School.

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